The contract covers what is commonly referred to as the IANA function, a traditional bundle of technical operations that includes the allocation of IP addresses, management of the internet root server system, and changes to the top tree of the net, defining where all top-level domains – including global domains such as .com and .net as well as the 250 country code domains such as .uk for Great Britain or .de for Germany – are located on the internet.

The decision was widely expected and the contract itself is largely a copy of the previous contract ICANN was first awarded back in 2000.

The contract lasts for five years but requires renewal each year. This approach has meant the US government can maintain a close control over changes, while also ensuring the function is revisited and refreshed over time.

The US government arm that decides the contract, the National Telecommunications and Information Administration (NTIA), made noises about moving the contract to a different party in a "request for information" in February, but it was largely seen as a way of applying pressure to ICANN to improve its frequently criticised procedures. ICANN relies heavily on its stewardship of the IANA function to provide it with global legitimacy.

That pressure appears to have produced results. ICANN announced in July that it would start implementing a secure and automated way for the technical administrators of top-level domains to make vital infrastructural changes.

A large number of country-code managers have been asking for such a system for years, and a test-bed offering such a facility has been in operation for over two years. The contract also details a new, visible method for any changes that take more than seven days in an effort to improve efficiency of the process.

But perhaps the most important change to the contract has been the inclusion of wording that makes it clear that there is a separation between IANA function and the policy role that ICANN plays – a connection that ICANN has actively sought to blur to the vocal irritation of others.

Nonetheless, the contract secures ICANN's future and potentially stabilises a contentious issue at the heart of the internet.

ICANN CEO Paul Twomey was, naturally, pleased with the announcement. "In executing this contract the Department of Commerce has confirmed that ICANN is uniquely positioned to perform this function.

"It means that ICANN remains the organisation responsible for a range of functions that are vital to the daily operation of the Domain Name System (DNS) and, hence, the internet."

The decision was also welcomed by one of the organisations most vocal about their concerns over IANA.

Chairman of the Council of European National Top-Level Domain Registries (CENTR), which represents 52 mostly European top-level domains, Paul Kane, told us: "The process undertaken by the NTIA clearly distinguishes and seperates the IANA service contract to the global community, from that of ICANN's general remit as the open forum for discussing Internet coordination issues.

"We welcome NTIA's selection of ICANN as the IANA contractor and all registries participating in the Internet Infrastructure Improvement Fund have have agreed to donate $190,000 to ICANN to ensure improvements in the IANA service."

The supply of funds to ICANN indicates yet another thawing in difficult relationships that ICANN, a non-profit US company, has had with organisations outside of the United States.

However, the most crucial contract renewal will come on 30 September when the US government reviews its Memorandum of Understanding (MoU) with ICANN.

At the end of July, the US government made it clear that it would transition its overseeing role over the internet and ICANN to a more international body. The details and the timeline for that transition remain a mystery, however, and are expected to be outlined in the MoU at the end of next month.